DP World warns off potential Djibouti suitors


DP World has issued a statement warning that its concession agreement to operate the Doraleh Container Terminal (DCT) in Djibouti “remains in full force and effect.”

Referring to news that the Pacific International Lines has signed a contract to manage the terminal and that Djibouti is currently in talks with CMA CGM to develop a new container terminal, DP World stressed it will “pursue all available legal recourse, including claims for damages, against any other entities that tortiously interfere or otherwise violate their rights with respect to the Concession Agreement.”

Following the Government of Djibouti’s seizure of DCT in February and its subsequent cancellation of the concession, which was awarded to joint venture Doraleh Container Terminal (DCT) S.A., which DP World has a 33% stake in, DP World stated the agreement was “recently upheld as a valid and binding contract under English law” by a tribunal under the London Court of International Arbitration (LCIA).

Exclusive rights

The agreement allowed DCT S.A. the right to operate the port, which it designed and built, and in turn DP World was mandated to manage the port, DP World said. The agreement also gave DCT and DP World exclusive rights to build and operate any other container ports and free zones in Djibouti

DP World said it, alongside DCT, have commenced a new LCIA arbitration against the Government of Djibouti.

The Djibouti Ports & Free Zones Authority (DPFZA) claimed in February that the contract was cancelled because of a dispute over terms and poor performance, but DP World said LCIA “rejected the Government of Djibouti’s attempt to rescind the Concession Agreement based on false allegations of corruption.”

It added that in a related proceeding, an English High Court Justice agreed that the concession agreement had been a “great financial success” for Djibouti.

DP World confirmed it hasn’t received a purchase offer for its 33% stake in Doraleh Container Terminal following DPFZA’s claim that it is prepared to buy the company out to avoid legal action.

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